Court rules NCAA violates antitrust law in ban on paying players for likenesses

Is Ed O’Bannon's lawsuit the first domino to fall in--as NCAA President Mark Emmert recently commented--“the end of college sports as we know it”? While the sky may not yet be falling, a federal court’s recent interpretation of antitrust law does have interesting ramifications for college sports moving forward.

On August 8, U.S. District Judge Claudia Wilken ruled that the National Collegiate Athletic Association’s (NCAA) ban on paying players for their likenesses is in violation of U.S. antitrust law. In doing so, Judge Wilken issued an injunction that prohibits college sports’ governing body from imposing rules that ban schools from offering players “a limited share of the revenues generated from the use of their names, images, and likenesses.”

In court, the NCAA had argued that its college athletes were “amateurs,” and thus did not have legal access to their name, image and likeness rights as to maintain their amateur status. Wilken rejected these claims, as well as the NCAA claim that these players could turn to alternative leagues (such as Arena football or foreign basketball) if they wished to be paid for their rights.

“The evidence shows that elite football and basketball recruits rarely pursue careers in these second-tier leagues immediately after high school and overwhelmingly prefer to play for FBS (Football Bowl Subdivision) football teams and Division I basketball teams,” Wilken said.

However, as noted by Sports Illustrated columnist and sports law expert Michael McCann, the decision is not a total loss for the NCAA. In fact, Wilken left many NCAA rules capping NCAA athlete income in place, and she left other changes at the NCAA’s discretion.

“For instance, Wilken’s injunction permits the NCAA to cap compensation to student-athletes at the cost of attendance, as that term is defined by the NCAA,” McCann writes. “While cost of attendance is a higher dollar figure than a grant-in-aid (athletic scholarship), it is nonetheless a limited dollar amount that may not lead to significant quality of life changes for most basketball and football players.”

Wilken’s decision also proposes placing income earned through name and likeness rights to be placed in a trust, paid out after the student-athlete is finished with their education. The decision also allows the NCAA to continue to ban outside athlete endorsements.

Still, the NCAA announced that it plans to appeal the decision. The ongoing case remains just one of many that test the boundaries of the NCAA’s “amateurism,” including an ongoing labor case in which one group of college athletes is attempting to form a union.

Assistant Editor

Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...